4 Former National Grid Workers Charged In ‘Kickback Scheme’: Feds

CENTRAL ISLIP, NY — Four Long Island men have been arrested in connection with their involvement in a kickback scheme in which they accepted hundreds of thousands of dollars for steering no-bid National Grid contracts to specific Long Island-based contractors, according to the U.S. Attorney’s Office.

In a criminal complaint unsealed in federal court Thursday, the men — all former managers employed in the facilities department of National Grid — were accused of conspiring to violate the Travel Act by taking bribes and kickbacks in exchange for steering contracts to certain contractors with whom the company did business, prosecutors said.

The names of the contractors involved were not revealed in the complaint.

Charged in the complaint are Devraj Balbir, 33, of North Bellmore; Patrick McCrann, 57, of Selden; Jevan Seepaul, 36, of Rockville Centre; and Richard Zavada, 65, of Hicksville. Ricardo Garcia, 48, of Stroudsburg, Pennsylvania was also charged in the complaint.

Between 2013 and 2020, the men sought out and accepted bribes and kickbacks from the owners of the contractor and other contractors in connection with the awarding of maintenance work contracts for the company, prosecutors said.

One contractor secured facility maintenance contracts worth over $50 million from the company during the time the contractor was paying bribes to the defendants, according to prosecutors.

Prosecutors said the “illicit payments” took multiple forms, such as the obvious — cash — but also the purchase of a recreational vehicle, an overseas vacation, and even home improvements and landscaping.

The men “communicated with the contractors about bribe payments by text messages, among other forms of communication,” and in one example, on Sept. 2, 2016, McCrann texted a contractor, “Sandwich was light on the meat” and that he was “a little concerned,” indicating that a bribe payment had been insufficient, prosecutors said.

The contractor replied, “I’ll ask for a nice one next time,” prosecutors said, adding that the response indicated “the next bribe would be larger.”

Mark Lesko, acting U.S. attorney for the Eastern District of New York, said the men made “corrupt demands for bribes and kickbacks to line their own pockets and upgrade their lifestyles while putting the contractors at risk of losing business if they did not comply.”

“This office is committed to protecting the integrity of the bidding process and ensuring that businesses compete on a level, honest playing field,” he said.

Lesko announced the arrests Thursday with William F. Sweeney Jr., assistant director-in-charge of the Federal Bureau of Investigation.

Gov. Andrew Cuomo called the allegations against the former National Grid employees as “egregious conduct” on Friday, and announced that the state’s Department of Public Service has launched an investigation into National Grid’s downstate operations, “to ensure we get to the bottom of it immediately and that justice is served.”

Cuomo said the state has “zero tolerance for utility employees who violate the law in order to line their own pockets.”

“Our investigation will thoroughly examine and determine if the company failed to have the appropriate safeguards in place to prevent criminal activities on the part of employees, and if not, the utility will be held accountable," he added.

The department’s chief executive officer, John B. Howard, said that as a result of the employees’ alleged criminal activity the department’s investigation will determine if the utility's customers were financially harmed by the scheme and if so, it will seek “full restitution on behalf of the customers.

"The company stated that the contracts did not involve critical gas infrastructure, so public safety is not at risk,” he said. “The department's investigation will work to confirm that fact.”

A National Grid spokeswoman told Newsday that the company “fully cooperated” with the investigation and will take any steps necessary to enhance our existing controls to prevent future occurrence.”

She went on to say that the company has “zero tolerance for unethical and illegal behavior” and that its employees are “committed to our values and professionalism as they carry out their responsibility serving customers every day. The alleged misconduct, of a handful of former employees, contradicts that commitment.”

As managers in the facilities department of the company, McCrann, Garcia, after May 1, 2019, and Balbir, after May 1, 2020, were able to approve no-bid contracts worth less than $50,000, and the contractor understood that if a bribe payment was not made, the company’s work would be awarded to the contractor’s competitors, prosecutors said.

In exchange for the bribes, the men, including Seepaul and Zavada, also took steps to help the contractor in securing contracts for which there was a bidding process, including providing non-public bidding information, which circumvented the company’s competitive bidding process, and they also offered favorable reviews of the contractor’s work, according to prosecutors.

The contractor paid bribes to ensure the men did not slow or stop disbursement of project funds to them, provide negative performance reviews regarding their work, or claim their work did not meet contractual specifications, prosecutors said.

During 2017 and 2018, the contractor paid tens of thousands of dollars in bribes to Balbir in the form of renovations performed at his home, and between August 2015 and April 2019, the contractor also made college tuition payments of over $30,000 for a family member of Garcia, prosecutors said.

Garcia sent a text message to a contractor in February 2018 that contained images of airline reservations for two people in April 2018 from Newark to Dubai, and hotel reservation information for a 10-night hotel stay there for two people so that the contractor could pay for the expenses, according to prosecutors.

Financial records obtained during the investigation also showed the contractor paid about $100,000 for work at Seepaul’s home in 2017, prosecutors said.

Agents recovered about $300,000 in cash from a safe deposit box held by Zavada, prosecutors said. And in November 2020, FBI special agents executed a search warrant at his home in Hicksville, seizing electronic spreadsheets he maintained that contained dates, the amounts of bribe payments, and the names of various entities that provided facilities services to the company, prosecutors said.

McCrann and Balbir were released on $250,000 bonds, while Zavada, Seepaul, and Garcia were released on $75,000 bonds, according to John Marzulli, a spokesman for the U.S. Attorney’s Office.

Garcia’s attorney, Jonathan Rosenberg of Brooklyn, told Patch “the government, in this case, has acted entirely in good faith and we will assert our position in court, not in the press.”

Seepaul’s attorney, Jeffrey Lichtman of Manhattan, told Newsday that there was a “culture that was already in existence at National Grid,” when his client started working there. “This isn’t something that he did on his own.”

Balbir’s attorney, Jeffrey Chabrowe of Manhattan, was not immediately available for comment.

Zavada’s attorney, Edward Palermo of Hauppauge, did not respond to a request for comment.

McCrann’s attorney, Andrew Karpf of Huntington Station, could not be reached for comment.

Cuomo’s office said that the investigation into National Grid’s contracts will focus on identifying any financial impacts on ratepayers, the recovery of costs for ratepayer benefit, and the determination of how the activity was not uncovered for so long.

It will also seek to identify changes that must be made at National Grid to ensure that such a situation does not arise again, according to the office.

The Department of Public Service has conducted investigations of utilities involving similar employee misconduct.

Ten Con Edison supervisors and employees and one retired supervisor were arrested in 2009 by the U.S. Attorney for arranging to have the utility pay inflated claims by a contractor in return for over $1 million in bribes and kickbacks to the employees over nine years.

At the time, Con Edison was not aware of the illegal activities. In response to the arrests, the Public Service Commission launched an investigation, and that case eventually resulted in securing $171 million for Con Edison's customers.